Stellar (XLM) Facts and Key Points: Everything You Need to Know!

Bittime - Discover interesting facts and key information about Stellar (XLM), one of the most promising digital assets. Learn about its technology, network, and partnerships that make it a top choice in the world of cross-border transactions.

Stellar (XLM) has been one of the digital assets that has caught the attention of many, especially for those interested in blockchain technology and innovation in the financial sector.

Known for its main purpose of making cross-border money transfers easier, Stellar has proven that it is more than just a digital asset.

It also offers a fast and affordable solution for transactions between currencies around the world, making it an increasingly popular choice. In this article, we will discuss the facts and key points about Stellar (XLM) that you should know.

What is Stellar (XLM)?

Stellar is a decentralized payment network that aims to enable fast, cheap, and secure cross-border transactions. In it, XLM or Stellar Lumens act as the main digital asset used to facilitate transactions between different currencies.

Stellar allows users to send and receive money almost instantly at a very low cost, making it an ideal solution for a more efficient global payment system.

Founded in 2014 by Jed McCaleb and Joyce Kim, Stellar is not only focused on individuals, but also seeks to provide more inclusive financial access for the entire world.

One of Stellar's big goals is to make the financial system more open and accessible to anyone, without depending on intermediaries or traditional financial institutions.

This also includes the ability to create and deliver one's own tokens on top of the Stellar network, which makes it easier to launch an ICO (Initial Coin Offering) compared to other platforms such as Ethereum.

Also read: What is Stellar Lumens (XLM)?

Advantages of Stellar Technology (XLM)

One aspect that sets Stellar (XLM) apart from many other digital assets is the technology behind the network.

Stellar uses the Stellar Consensus Protocol (SCP) as its consensus mechanism, which is more efficient compared to Proof of Work (PoW) or Proof of Stake (PoS) used by many other projects.

SCP allows the Stellar network to reach consensus quickly and securely without relying on third parties, allowing transactions to take place within seconds at a very low cost.

Moreover, the Stellar network is not burdened with high fees and long transaction times, as is the case with traditional payment systems.

In fact, transaction fees on Stellar are only around $0.00006 per transaction, which is much cheaper than international transfer fees that can be as high as $75. This makes Stellar very attractive for use in cross-border remittances.

Also read: Reasons for XLM Price Increase: Why Trending and Bullish Now?

Stellar (XLM) Key Points You Need to Know

Digital Assets for Cross-Border Transactions: Stellar (XLM) facilitates the exchange of digital currencies at a low cost and quickly. Users can send and receive different types of assets, be it fiat or crypto, across the globe.

Global Financial Inclusion: One of Stellar's main visions is to reduce poverty and increase financial literacy around the world by enabling individuals in developing countries to access financial services that were previously unavailable to them.

Partnerships with Major Corporations: Stellar has forged strategic partnerships with many major companies in the world, such as IBM. Through these partnerships, Stellar is helping to build a real-time global payment system that can serve more than 70 countries.

In addition, Stellar is also supporting the development of a central bank digital currency (CBDC) by the Ukrainian government.

Controlled Inflation on XLM: Stellar has an initial supply of 100 billion XLM tokens, with annual inflation of 1%. This is designed to maintain a balanced supply and avoid deflation that could limit the use of XLM in everyday transactions.

Security and Speed: Stellar uses a consensus protocol that allows for faster and more secure transactions than many other blockchain platforms. This makes it an excellent solution for micropayments and financial applications that require fast response times.

How is Stellar Different from Ripple?

Although Stellar and Ripple have a lot in common, the two projects have different philosophies and target markets.

Stellar focuses more on individuals and financial inclusion, while Ripple focuses more on working with large financial institutions to replace existing global payment systems.

Stellar uses the Federated Byzantine Agreement (FBA) for its consensus mechanism, while Ripple uses a different protocol.

Another difference lies in the distribution of tokens. Stellar has controlled inflation, while Ripple has a fixed and limited supply of tokens.

In terms of partnerships, while both have major partnerships, Stellar focuses more on the individual sector and small projects, while Ripple works with global banks and financial institutions.

Also read: Stellar (XLM) Price Prediction Analysis 2024, 2025, and 2030

The Future of Stellar (XLM)

The future of Stellar (XLM) seems very bright, as more and more companies and countries are turning to blockchain-based solutions to make cross-border payments easier.

Stellar is also constantly evolving their network and technology to improve transaction efficiency and security. With major partnerships and growing recognition in the financial world, Stellar has the potential to be one of the leaders in the digital finance revolution.

Conclusion

Stellar (XLM) offers a very interesting solution in the world of digital assets, especially when it comes to cross-border transactions.

With advanced technology, low fees, and ever-expanding strategic partnerships, Stellar has proven itself as a platform that could overhaul the way we think about payments and the global economy.

Whether as a means of international remittances, or as a platform for ICOs, Stellar (XLM) offers great potential in the future.

FAQ

What is Stellar (XLM)?

Stellar (XLM) is a decentralized payment network that facilitates cross-border transactions with low fees and high speed. XLM serves as the primary digital asset to ease currency exchange around the world, support financial inclusion, and simplify transfers between currencies.

How is Stellar different from Ripple?

Stellar is more focused on financial inclusion and individuals, while Ripple is oriented towards working with large financial institutions. In addition, Stellar uses the Stellar Consensus Protocol (SCP), while Ripple uses a different protocol to achieve consensus.

What are the technological advantages of Stellar (XLM)?

Stellar uses the Stellar Consensus Protocol (SCP) consensus mechanism, which enables transactions to be faster, secure, and at a very low cost (around $0.00006 per transaction). This makes it ideal for international money transfers and other financial applications.

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References

coinbureau.com, Stellar Review: The Network Moving Micro Payments, accessed on December 4, 2024.

weareblox.com, Stellar: everything you need to know about XLM, accessed on December 4, 2024.

Author: AWW